Nonprofit Resources

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Proposed Rules Governing Borrower Defense and Financial Responsibility

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In an effort to hold higher education institutions accountable and protect the federal government’s financial interests, the Department of Education recently proposed new regulations that will more than likely impact your nonprofit institution.

These regulations could result in adverse penalties directly to your institution for circumstances that are unrelated to student outcomes. Adopted regulations could result in new rules on borrower defense to repayment of federal student loans, resulting in the requirement for institutions to post letters of credit and provide extensive disclosures to enrolled and prospective students, among many other things.

We highly encourage institutions to file comments with the Department of Education. The negotiated rulemaking committee selected by the Department of Education is limited in financial expertise members, and comments from business officers are needed.

The proposed rules and access to submit comments can be found here. The deadline for submitting a formal comment is August 1, 2016. This article from the NACUBO has additional insight.

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